Microsoft Retiring Skype for Business Online to Force Teams Use

On July 30th, Microsoft announced that Skype for Business Online will be retired on July 31, 2021 and all new Office 365 customers will be onboarded directly to Microsoft Teams as the default for chats, meetings, and calls starting on September 1, 2019. Microsoft also mentioned that current Skype for Business Online customers will experience no change in service, and new users can continue to be added as needed.

Is it just me, or is Teams (very recently) starting to pop-up every time I turn on my computer? Coincidence? I think not.

In addition, Microsoft stated they will be helping migrate customers to Teams through comprehensive resource and planning documents available online, free instructor-led training and FastTrack onboarding assistance for eligible subscriptions (translation: FastTrack training will come at a cost). If you are an enterprise customer, especially one that may be making the move to Office 365 for the first time after September 1st, my recommendation would be to challenge Microsoft to do more. How about free resources (actual live people) to help with the migration, training and change management involved? The fact of the matter is that if you are an enterprise that has not yet adopted Office 365, you are one amongst a few and you should be getting many concessions beyond better Teams migration assistance.

So why is Microsoft really retiring Skype for Business Online in two years and making Microsoft Teams the default for new Office 365 customers? I have certainly heard from customers and read the reports that Teams brings an upgraded experience for users that they were not getting with Skype for Business Online. It has, in many instances, improved collaboration, made companies more agile, and improved the efficiency of key workflows, and I am certain Microsoft wants to ensure these benefits are used by all customers. As altruistic as that may seem, I can’t help but also think (and know) that this is also a great tactic to ramp adoption and essentially force customers to use Microsoft Teams. To Microsoft and other cloud vendors, use is often more valuable than the initial revenue attached. Use leads to stickiness and stickiness leads to long-term revenue growth.

Microsoft has made it crystal clear that they are very much focused on getting more Office 365 and Microsoft 365 customers (especially enterprise customers) to roll out and use Microsoft Teams, available to them as part of their subscription, across their entire organization. In working with many enterprise customers, this is an area that needs Microsoft’s attention as many customers have informed me that their rollouts have been either delayed, slow to start, or are just now getting started under a piecemeal ‘user subset by user subset’ approach. Of course, Microsoft is also very focused on pushing all cloud stragglers over to Office 365 or better yet why not start them with the all-in cloud bundle Microsoft 365? Per the announcement, for net-new customers, they don’t have to worry about forcing Microsoft Teams use as it will be the only option.

The collaboration software market is an ultra-competitive space and that is probably an understatement given the TAM (Total Available Market) and the dollars at stake. Collaboration vendors like Google (Hangouts), Slack, and even Facebook (Workplace), are grabbing market share at an accelerated pace and most specifically (and importantly) they are getting enterprises to adopt. According to recent reports, Facebook has 150 enterprise customers with more than 10,000 users, including Walmart, Campbell’s and Starbucks. Slack identifies Target, The New York Times, and 21st Century Fox as some of their enterprise customers.

Microsoft realizes that getting adoption and forcing actual use will give them, quite possibly, the best shot to keep competitors out. They also know that getting enterprise customers to use Teams across the entire organization is critical as they look to accelerate the adoption of their Office 365 F1 (Firstline Worker) product within enterprises, where Teams is a key component. The Firstline workforce (i.e., deskless workers on the shop and manufacturing floors) represents an enormous opportunity for Microsoft to expand utilization of Office 365 as well as their customer’s Annual Contract Value (ACV). Microsoft also knows that this user community is the enterprise entry point that Google Cloud has identified and is therefore very much focused on doing whatever they can to get enterprises to adopt and have these users use G Suite.

I fully expect Microsoft will continue to aggressively push their customers to adopt and use Microsoft Teams moving forward. I also have a high degree of confidence that more tactics like retiring Skype for Business Online will be used along the way.